Spotlight

Hundred not out!

Where there is a will, there is a way and this rings true for Alembic Pharmaceuticals. Alembic's 'try me' instead of 'why me?' attitude towards challenges has indeed made it survive the odds of the past century. Sachin Jagdale checks the score

"We plan to strengthen our domestic formulations market and enter new therapy segments. Organic and inorganic growth opportunities are always under consideration to further strengthen the company's position in the domestic market" - Chirayu Ramanbhai Amin Chairman and Managing Director Alembic Pharmaceuticals

Alembic Pharmaceuticals has seen it all—the pre-independence era of quotas and regulations, the restrictions during world wars, and its own gradual shift from chemicals to pharmaceuticals. After a hundred years, as the company celebrates its centenary year, it is time to savour a hard-won success. Alembic's voyage is even more significant as it has gone through those testing times, which many other Indian pharma majors have not and has survived to tell the story.

The shortage of foreign exchange from 1950 to 1960 had made technology sourcing and import of equipment difficult. Despite these obstacles, Alembic utilised local talent and developed indigenous technology to produce life saving drugs like penicillin. The company set up India's largest penicillin production facility at Vadodara in the 1960s.

Eventful journey

Alembic's innings can be broadly divided into three phases. It started out as Alembic Chemical Works, primarily engaged in the manufacture of tinctures at Baroda. In its first phase, from 1907-1970, the company made a name for itself with a range of cough syrups, vitamins, tonics and sulphur drugs. In fact, Alembic's Glycodin cough syrup continues to soothe irritable cough even today. The installation of a French distillery plant for pharmaceutical purpose was another crucial milestone in Alembic's innings.

The second phase, starting in the seventies, saw the company concentrating on more complex antibiotics. Using expertise from Eli Lilly, Alembic manufactured erythromycin for the first time and by the eighties, its brand Althrocin became a top pharmaceutical brand in the country. Azithral Liquid, the first of its kind in the world, was launched in the next decade. By 2004, the company had commercialised bulk production of roxythromycin, azithromycin, clarithro-mycin and cephalosporin. Over the years, the pharma industry has gone through some crucial facelifts. The pharma industry, which was plagued by inadequate regulation and spurious drugs, heaved a sigh of relief with the more comprehensive regulation process. India's technical expertise has also been acclaimed in the international arena.

In tandem with the industry, Alembic has also been shifting gears. "We have developed a strong management team with enhanced infrastructure. There is a budget of Rs 52 crore for the expansion of our API and formulation facilities at Panelav near Vadodara. We have a research centre, BioArc, for our research activities," says Chirayu Ramanbhai Amin, Chairman and Managing Director, Alembic Pharmaceuticals.

Brand wagon

Today the company has top brands like Althrocin, Roxid, Zeet, Wikoryl, Magadol and Nimegesic. Among OTC products, Glycodin and sugar substitute Zero enjoy considerable consumer mindspace. Six of Alembic brands feature among the top 300 brands in the country. Alembic enjoys leadership position in the macrolides segment and also was the first in the country to produce cephalosporin.

The company is now embarking on its third phase. Two announcements in the centenary year point to the future course and global ambitions of this company. While the first relates to its domestic business, the second concerns an R&D licensing deal. "To increase the reach in the domestic market, Alembic acquired the non-oncology business of Dabur for Rs 159 crore in February 2007. The acquisition provided the company entry in to the anti-diabetic and cardiovascular therapeutic segments. Currently, around 75 percent of Alembic's revenues come from its domestic business," informs Amin. In May this year, company signed a licensing agreement with UCB, a global bio-pharma leader, for an NDDS (Novel Drug Delivery System) deal worth $11 million and future royalties on the launch of the product. "There is a huge opportunity for exports and international markets, which is being rightly explored by us. We plan to increase business from international markets such as Europe, Canada, South America and US. We are looking at filing ten DMFs and 12-15 ANDAs per year," he adds. Alembic's annual turnover for the financial year ending March 31, 2007 shows revenues of Rs 722 crore, with PAT of Rs 71 crore. Domestic business contributed 78 percent of revenues, while exports were at 22 percent. The company was ranked 14th in the domestic formulation market with a market share of approximately two percent (ORG-MARG-May 2007).

Human resources

No one can come out with a perfect century without the a good team and Alembic too has one. When employees and employers have a commitment to one another, everyone benefits. Alembic considers its employees its most productive asset. The management firmly believes that it is through dedication, initiative and skills of the employees that Alembic has prospered and will continue to move ahead. According to Amin, "Alembic has employees who have stayed with the company for decades and still continue to do so. Alembic was and will be treated as an institution in Vadodara, not merely a company which employs. We recognise the importance of people and their patronage towards Alembic." "The company attracts best of the talent from all over the country. It has extensive training programme to keep employees updated. Alembic offers its employees lot of space and autonomy to perform and deliver," he adds.

Telescope

Alembic is hundred not out and gearing to complete many more centuries. "We plan to strengthen our domestic formulations market, and to enter new therapy segments. Organic and inorganic (growth) opportunities are always under consideration to further strengthen the company's position in the domestic market. Alembic is increasing its efforts in the international regulatory markets," opines Amin. Alembic is now scouting the global market. Amin says, "The company plans to increase its market footprint to other foreign markets like Brazil, Russia, Australia and South Africa. There is a good opportunity in contract research as well as contract manufacturing for MNCs and Alembic is tapping this opportunity as well."

sachin.jagdale@expressindia.com